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Revitalize HMA - Board Nomination

Revitalize HMA - Board Nomination

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Published by Devon Shire
Revitalize HMA - Board Nomination
Revitalize HMA - Board Nomination

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Published by: Devon Shire on Jun 25, 2013
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07/19/2013

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FORIMMEDIATERELEASE
Glenview
Capital
Initiates
Democratic
Process
to
Elect 
Eight 
Industry
Leading
Nominees
to
HMA
Board
of 
Directors
NEWYORK,NY(June25,2013)–GlenviewCapitalManagementLLC,whichowns14.6%ofthecommonstockofHealthManagementAssociates,Inc.(NYSE:HMA),todayfiledapreliminaryConsentSolicitationStatementnominatingeightindustry‐leadingcandidatestoreplacethecurrentBoardofDirectors.Theannouncement,whichalsoisavailableatwww.revitalizehma.com,wasmadeinthefollowingopenlettertoallshareholders:
 
June25,2013FellowHMAShareholders:Ourfirm,GlenviewCapitalManagement(“Glenview”),hasbeenashareholderofHealthManagementAssociates,Inc.(“HMA”orthe“Company”)formorethantwoyears,andpresentlyweown14.6%oftheCompany.Thismorningwesetinmotionademocraticprocessbywhich,pendingfinalizationofourdocumentationafterfilingwiththeSecuritiesandExchangeCommission(“SEC”),weasshareholderswillbepresentedwithanoptiontoremoveandreplacethesittingBoardofDirectorsofHMAwitheighthighlyqualified,independent,newlyelecteddirectors(collectively,the“FreshAlternative”)toleadourCompanyforward.Webelievethisdecisionisimportantandisworthyofyourtime,fullconsiderationandcompletestudy,andinsupportofthatourdisclosureisextensive.Thebackgroundandrationaleforthisextraordinarysteparesetforthingreatdetailinthebodyofthisletter.FurthersupportinginformationpresentedintheformofaslidepresentationthatwillbefiledwiththeSECandisavailable,alongwithothersupportingdocuments,onthepublicwebsitewww.revitalizehma.com.However,inrespectofyourtimethismorningweofferthefollowingexecutivesummary:Inourroleas“suggestivists”,constructiveshareholdersthatoftensuggesttoManagementandoccasionallytoBoardswaystoimprovevalueforallshareholders,wearebringingoursuggestionsdirectlytoyou,ourfellowownersofHMA:
a)
 
It
 
is
 
widely
 
recognized
 
by
 
publishing
 
analysts,
 
financial
 
press
 
and
 
professional
 
investors
 
that
 
there
 
is
 
significant
 
room
 
for
 
improvement
 
at
 
HMA.
 
For
 
over
 
a
 
decade,
 
despite
 
the
 
best
 
efforts
 
of 
 
well
intentioned
 
individuals
 
at
 
the
 
Company,
 
HMA
 
has
 
fallen
 
short
 
in
 
their
 
financial
 
returns
 
delivered
 
to
 
shareholders,
 
their
 
financial
 
management
 
and
 
focus,
 
 
2
our
 
shared
 
aspirational
 
goals
 
on
 
regulatory
 
compliance
 
and
 
the
 
pursuit
 
of 
 
a
 
stable
 
and
 
effective
 
leadership
 
team.
 
Culturally,
 
we
 
believe
 
that
 
an
 
overemphasis
 
on
 
aggregate
 
growth
 
at
 
the
 
expense
 
of 
 
per
 
share
 
value
 
creation
 
and
 
optimal
 
return
 
on
 
capital
 
has
 
led
 
to
 
a
 
substandard
 
strategic
 
and
 
financial
 
approach.
 
b)
 
As
 
an
 
alternative,
 
we
 
are
 
setting
 
forth
 
a
 
path
 
that
 
we
 
believe
 
creates
 
the
 
strongest
 
future
 
for
 
HMA’s
 
patients,
 
employees
 
and
 
investors
 
while
 
minimizing
 
the
 
risk
 
to
 
each
 
vital
 
constituency.
 
We
 
suggest
 
HMA
 
shareholders
 
consent
 
to
 
fully
 
reconstitute
 
the
 
Board
 
with
 
the
 
eight
 
highly
 
qualified
 
nominees
 
proposed
 
herein.
 
During
 
a
 
management
 
transition
 
period
 
the
 
new
 
Board
 
should
 
consider
 
retaining
 
a
 
senior
 
team
 
from
 
Alvarez
 
&
 
Marsal
 
who
 
has
 
confirmed
 
to
 
us
 
its
 
availability
 
to
 
serve
 
immediately
 
as
 
interim
 
management
 
for
 
an
 
initial
 
period
 
of 
 
stabilization,
 
review
 
and
 
improvement
 
at
 
the
 
discretion
 
of 
 
the
 
new
 
Board.
 
c)
 
The
 
nominees
 
of 
 
the
 
Fresh
 
Alternative
 
offer
 
a
 
strong
 
blend
 
of 
 
directly
 
relevant
 
skills
 
(all
 
nominees
 
are
 
counted
 
more
 
than
 
once
 
in
 
the
 
following
 
tally):
 
i)
 
All
 
eight
 
directors
 
have
 
healthcare
 
provider
 
/
 
facilities
 
experience;
 
ii)
 
A
 
majority
 
of 
 
the
 
nominees
 
have
 
served
 
in
 
a
 
capacity
 
as
 
CEO,
 
CFO
 
or
 
COO
 
of 
 
meaningfully
 
sized
 
enterprises;
 
iii)
 
Half 
 
of 
 
the
 
nominees
 
have
 
strong
 
corporate
 
finance
 
backgrounds;
 
iv)
 
Two
 
nominees
 
bring
 
specialized
 
legal
 
and
 
regulatory
 
experience
 
while
 
two
 
others
 
bring
 
specific
 
experience
 
in
 
turnaround
 
situations;
 
v)
 
Three
 
nominees
 
bring
 
skills
 
and
 
experience
 
in
 
human
 
resources
 
and
 
managed
 
care
 
areas;
 
vi)
 
The
 
nominees
 
include
 
both
 
long
term
 
business
 
builders
 
and
 
operators
 
as
 
well
 
as
 
leaders
 
who
 
have
 
sold
 
or
 
combined
 
businesses
 
in
 
strategic
 
or
 
financial
 
transactions;
 
and
 
vii)
 
Consistent
 
with
 
the
 
desire
 
to
 
constitute
 
a
 
fresh,
 
independent
 
board,
 
there
 
are
 
no
 
current
 
or
 
former
 
Glenview
 
employees
 
offered
 
as
 
nominees.
 
d)
 
We
 
believe
 
that
 
our
 
shared
 
investment
 
in
 
HMA
 
is
 
best
 
served
 
with
 
a
 
Board
 
who
 
has
 
the
 
capabilities,
 
vision,
 
tenacity
 
and
 
spirit
 
to
 
build
 
a
 
strong
 
independent
 
HMA
 
and
 
resolve
 
legacy
 
regulatory
 
issues
 
while
 
concurrently
 
being
 
open
 
to
 
all
 
avenues
 
of 
 
shareholder
 
value
 
creation,
 
including
 
strong
 
capital
 
allocation
 
and
 
the
 
rigorous
 
evaluation
 
of 
 
all
 
strategic
 
alternatives.
 
WeurgeHMAshareholderstoreadthecompletematerialscarefullyalongwithanyinformationofferedbythesittingHMABoardsothateachshareholdercanmakeawellinformeddecisioninthisdemocraticprocess.Forimportantinformationonhowtovoteyoursharesattheappropriatetime,pleaserefertotheinformationontheRevitalizeHMAwebsitewww.revitalizehma.comandthedefinitiveconsentstatementwhenavailable.
 
3Wewillnowreviewthesituationandourthoughtprocessingreaterdetail.Glenviewisaninvestmentmanagerinitsthirteenthyearofoperation,managingmorethan$6billionacrosstwofamiliesofinvestmentfunds.Ourinvestmentinhospitals,whichtotalsapproximately$2.0billionacrossfivemajorUShospitalchains,reflectouraffinityforthelong‐termgrowthandstabilityofthebusiness,ourrecognitionofthegrowthopportunitiesavailablethroughtheperiodofimplementationofexpandedinsurancecoverage,ourbeliefinthestructuralcompetitiveadvantagesoffor‐profithospitalchains,andourexcitementabouttheopportunitiesforreinvestmentoftheindustry’sstrongcashflowsandgrowingdebtcapacityasprofitabilitybuildsthroughtime.Assuch,ourinitialinvestmentinHMAbeganinearly2011andwebecamegreaterthan5%shareholdersintheCompanymorethanoneyearago.Ourlong‐termfocusinHMAisnotuniquetoourhistorybutratherisdeeplyingrainedinourculture.Overtheyears,weandourinvestorshavebeenprivilegedtoinvestinanumberofstrong,secularlygrowingcompaniesrunbystrongmanagementteamsinconjunctionwitheffectiveandconstructiveBoardsofDirectorswhohavebeenwonderfulstewardsoftheassetsinwhichtheyhavebeenentrustedtoleadbytheownersoftheCompany:publicshareholders.Insuchcases,wehavebeenabletosubstantiallyinvestinthesharesofExpressScriptsovera10yearholdingperiod,McKessonandThermoFisherScientific(anditspredecessors)foreightandnineyears,respectively,Cigna,LifeTechnologies(anditspredecessors),Pentair(anditspredecessors),Aon,AmericanTower,CrownCastleandothersoverafiveyearholdingperiod.Infact,wehaveheldover90investmentsforlongerthanourcurrenttenureofHMA,solidifyingourcredentialsaslong‐termshareholdersratherthantransitoryopportunists.Wehavefoundthecombinationofastrongindustry,astrongbusiness,astrongmanagementteam,aneffectiveBoardandlong‐termshareholderstobethe“DreamTeam”ofshareholdervaluecreation.Throughouttheyears,wehavecomeacrosssituationswherewebelievetheindustryandbusinessareeachattractivebutthatthemanagementteam,strategicdirectionorlong‐termcapitalallocationplanaresuboptimal.Insuchcases,weattempttouseourconversationswithmanagementasatwo‐wayconstructivedialogue,wherewenotonlygainfromthebenefitsoftheirinsightsregardingtheindustryandlong‐termrisksandopportunitiesbutwherewemayalsoshareourviewsonissueswherewemayhaveaparticularexpertise,particularlyintheareasofcapitalallocation,long‐termfinancing,shareholdercommunicationsandstrategicalternatives.WedonotexpectnordemandperfectionoutofanymanagementteamorBoard,norareweourselvesabletodeliverperfectiontoourowninvestors.However,wehavefoundthatorganizationsthataretrulyopen‐mindedandlearnfrombothpriormistakesandtheexperiencesofotherswithsimilarchallengesandopportunitiesbecomethemosteffectiveorganizationsfortheirbusinessmission,theircustomerbase,theiremployeesandtheirshareholders.

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